Trend Scenarios for the Impact of Smart Contracts on Transaction Costs in Agricultural Enterprises
Daniel Petrov
Abstract: The article examines the impact of New Institutional Economics (NIE) on the agricultural sector, focusing on the role of smart contracts in reducing transaction costs and enhancing economic efficiency. NIE considers institutions as key factors for coordinating and managing economic interactions, particularly under conditions of high uncertainty, asset specificity, and opportunistic behavior. Smart contracts, based on blockchain technology, are presented as an innovative mechanism for automating the processes of negotiation, monitoring, and contract enforcement. They eliminate the need for intermediaries, minimize the risk of human error, and increase transparency within the value chain. Using stochastic models, the article evaluates the cost-effectiveness of direct inputs, contract work, and debt servicing under three scenarios – baseline, optimistic, and pessimistic. The results demonstrate the significant potential of smart contracts to transform the agricultural sector by reducing transaction costs and improving profitability, especially under full adoption. However, their implementation is constrained by underdeveloped infrastructure, a lack of technological expertise, and regulatory uncertainties. The article highlights the need for targeted institutional support to overcome these barriers. This study contributes to the literature through an interdisciplinary approach that integrates theoretical models and practical analyses, providing a foundation for the development of sustainable policies in the agricultural sector.
Keywords: blockchain; economic efficiency; institutional economics; smart contracts; transaction costs
Citation: Petrov, D. (2025). Trend Scenarios for the Impact of Smart Contracts on Transaction Costs in Agricultural Enterprises. Bulgarian Journal of Agricultural Economics and Management, 70(2), 15-27 (BG).
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| Date published: 2025-06-30
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